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Developers say retail deals getting tougher in West Michigan

April 24, 2017

Veteran developer Chris Brochert, a partner with Lormax Stern Development, has been in retail development for almost forty years, seen numerous real estate cycles, and notes how much more difficult it has become to put together deals in recent times. He gives TJ Maxx as an example of how higher development costs have contributed to the increase in difficulty to develop, “It’s gotten to the point today where a typical T.J. Maxx box costs $95 to $100 a square foot. Just 7 years ago, that same box was $70 a square foot. That’s not just like that in Michigan … It’s like that all over the country. ” Additionally, retailers demand for exclusive contracts, co-tenancy clause in agreements, among other requests make it more difficult for developers to navigate and move forward with projects. Retailers such as TJ Maxx, Nordstrom, and Bed Bath and Beyond have begun to adapt to the increase in development costs by purchasing pre-existing shopping centers, and improving them.

Developers say retail deals getting tougher in West Michigan